A hard Brexit deal could prove disastrous for the technology sector as Mayor Sadiq Khan releases an analysis report of the worst-case Brexit scenarios.
Khan’s analysis revealed that across the country a total of 92,000 fewer new jobs will be available as a result of a hard Brexit, leaving London alone with 11,000 fewer jobs.
In addition to the number of new jobs lost, a hard Brexit could prove a disaster for the London economy, possibly resulting in as much as £2 billion less economic output (gross value added) in the capital.
In this worst-case scenario, the UK would leave the Single Market and Customs Union in March next year, with no transitional deal in place. Although it sounds somewhat drastic, Khan firmly believes this scenario is a real possibility given the current situation of Brexit negotiations.
If the analysis were to become a reality, the losses would certainly wipe-out all the gains the tech sector has seen in the UK. The value, in status and economy, of the UK’s technology sector, has increased over the last year after London was voted the best destination for technology investments. This was in addition to London bring named the Unicorn capital of Europe, as Silicon Valley investors chose the UK over European rivals.
London’s Chief Digital Officer, Theo Blackwell, said: “London’s science and tech sectors are some of the most innovative and exciting parts of our economy and are the rival of anywhere in the world for their dynamism and creativity.
“A no-deal Brexit runs the risk of completely undermining the growth and development of recent years and could see London fall way down the league table of global science and tech hubs.”
Khan’s analysis suggests that the harder the Brexit deal, the more damage it is going to cause for both the tech sector and broader UK economy. Additional scenarios were also played out in the analysis, one of which looked at a two year transitional deal involving the UK remaining in the Single Market and Customs Union. If this scenario turned into a reality it would still leave a substantial total of 36,000 fewer new jobs across the STEM sector, including 5,000 in the capital alone.
The analysis could ignite further debate over the right or wrong path to take when it comes to Brexit, with the Mayor maybe hopeful that the analysis may encourage those in power to turn away from a hard Bexit.
“This independent analysis will shock the sector – Government must take action to safeguard jobs, investment and growth, or else we risk turning back the clock on years of progress and threatening our future prosperity,” said Mr Blackwell.
A hard Brexit could seriously impact not only the number of jobs that are available across the science and technology sectors but also Khan’s vision to grow London and boost the country’s competitiveness through digital skills and the STEM sector.
When asked if he would stay in the customs union on Sky News, Sadiq Khan said:
“According to the analysis I published today the outcome that leads to fewer jobs being lost, better investment and better output is to have a transitional deal being in the single market and the customers union. As somebody who is the Mayor of London my job is to put aside my personal views and make sure I back that up.”
Across the UK as a whole, the worst case scenario could leave almost half a million fewer jobs on offer with nearly £50 billion of investment lost by 2030. Even in the softest of Brexit scenarios, there could be 176,000 fewer new jobs UK-wide.
It brings to question whether the Government has looked at every impact Brexit is going to have when going through the notions of negotiations and to whether Khan’s analysis will bring May to rethink her approach.